East Coast CM Report of Recent Decisions – 2016 Vol. 1

January 1, 2016 / CM Reports

Articles in this report

Bailees Who Purport To Exempt Themselves From All Liability, Even For Their Own Negligence, Run Afoul Of UCC 7-204
In XL Specialty Ins. Co. v. Christie’s Fine Art. Stor. Servs., Inc., 2016 N.Y. Slip Op. 01901 (First Dep’t Mar. 17, 2016), the Appellate Division reversed the lower court’s holding that held that a waiver of subrogation was enforceable and barred the action where the bailment agreement purported to exempt defendant bailee from all liability.

Court Of Appeals Determines That Sidewalk Defect Not Abutting A Landowner’s Property Does Not Necessarily Absolve The Landowner Of Liability
In Sangaray v. West Riv. Assoc., LLC, 2016 NY Slip Op 01002 (Court of Appeals, February 11, 2016), the Court of Appeals reversed an order from the Appellate Division, First Department affirming the trial court’s decision granting summary judgment to landowner Defendant, West River Associates, LLC (“West River”). The Court of Appeals stated that even though Plaintiff tripped on a defect that was not in front of a landowner’s property, that landowner was not necessarily absolved of liability.

Maryland Appellate Court Extinguishes Insurer’s Fire Claim By Applying Spoliation Doctrine In A Ruling Of First Impression
In Cumberland Insurance Group v. Delmarva Power, 2016 Md. App. LEXIS 12 (Md. Ct. Spec. App. Feb. 1, 2016), the Maryland Court of Special Appeals, in an issue of first impression, employed the Spoliation Doctrine and held that Cumberland Insurance (“Cumberland”) could not pursue its claim against Delmarva Power.

New “Shocking” Addition To Labor Law § 240’s Already Broad Reach
In Nazario v. 222 Broadway, LLC, 135 A.D.3d 506, 2016 N.Y. App. Div. LEXIS 246, 2016 NY Slip Op 00251, a construction worker who was injured in a fall on a construction site brought a cause of action against the site’s owner and general contractor alleging violation of New York Labor Law §§240, 241(6) and 200 and common law negligence.

Ready To Launch Or Failure To Launch? Three First Department Decisions Giving Insight As To Whether A Contracting Party Owes A Duty Of Care To Third-Persons Under The Launch A Force Or Instrument Of Harm Exception
Generally, a contractual obligation of a party does not extend tort liability in favor of a non-contracting third-party. In plain terms, a party who asserts a tort claim must prove privity in order to recover against a tortfeasor. The Court of Appeals has, however, carved out three exceptions to this rule.

Second Circuit Addresses Whether Agency Request For Information Constitutes A “Demand” For Purposes Of Claims Made Policy
In Weaver v. AXIS Surplus, 2016 U.S. App. LEXIS 4199 (2d Cir. March 7, 2016), the United States Court of Appeals for the Second Circuit, applying New York law, concluded that an agency letter requesting information and advising of legal consequences of failure to comply constitutes a “demand” for the purposes of a claims made directors and officers liability policy.

The Malfunction Theory: Product Liability’s Saving Grace
Property damage cases arising from a failed product, such as a failed appliance or other item causing a destructive fire, are fairly typical. While a traditional negligence cause of action requires the plaintiff to prove the defendant manufacturer, distributor and/or retailer (collectively referred to in this article as “defendant” or “defendant manufacturer”) breached a duty owed to plaintiff, which then resulted in (or proximately caused) plaintiff’s damages, a sustainable product liability cause of action only requires proof: 1) that the defendant supplied a defective product, and 2) this defect resulted in injury to the plaintiff.

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